Friday, October 13, 2006

Value investing Techniques

Below is a list of what you should look at a company when analysing the stock:

  • Does the company sell products that are likely to endure ?
  • Is the business of the company easy to understand ?
  • Does the company invest in and operate businesses within its area of expertise?
  • Does the company have the ability to maintain or increase profitability ?
  • Does the company have control on its debt. ie Is it overexposed to debt ?
  • Does the company show consistently high return on equity and capital?
  • Have the earnings per share (EPS) and sales per share of the company shown consistent growth ?
  • Is the EPS growth above Market Averages ?
  • Has the company been buying back stock to increase shareholder value when the price is low ?
  • Has management wisely used retained earnigns to increase the rate of return (ROR) to shareholders?
  • Looking at the chart is the Share rising ?
  • Is the share Priced realistically based on PE, PEG and Dividend Yeilds?

If the company gets a tick in every column you might be onto agood share ...

Good Luck investing...

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